Rupee gains 12 paise against U.S. dollar as crude prices drop and foreign funds flow in

The Indian rupee rose 12 paise to reach 94.72 against the U.S. dollar in early trade on Tuesday. Falling crude oil prices and money coming from foreign funds into domestic shares helped the local currency go up. At the interbank foreign exchange market, the rupee opened at 94.68 and touched 94.60 before trading at 94.72. On Monday, the currency had fallen 8 paise to close at 94.84 after a 50 paise gain on Friday. Meanwhile, the dollar index traded at 101.65, up 0.03 percent. Brent crude oil traded lower at $104.76 per barrel in futures trade. Fresh talks between Iranian and Qatari officials helped ease crude prices by raising hopes for a fix to the West Asia war and steady energy supplies.

Market Gains

In the domestic share market, the Sensex jumped 551.77 points to 76,244.55 in early trade, which is a 0.73 percent rise. The Nifty climbed 129.60 points to 23,570.40, marking a 0.55 percent increase. Foreign Institutional Investors stayed net buyers for the second day in a row on Monday, buying equities worth 3,114.68 crore rupees on a net basis.

Context

Currency values change daily based on global events, crude oil costs, and how much money foreign investors put into local stock markets. When crude oil prices drop, countries that import oil spend less foreign exchange, which often supports the local currency.